An expensive/cheap iPhone...

iPhone.jpg

While I have been living here in France, I have made some new friends. They are all either Brits or Aussie's. I've met most of them in my French language courses. Several of them are sporting the latest and greatest iPhones, so I took the opportunity to quiz them about the cost of their phones. I have always heard that cell phones are not subsidized in Europe and are therefore MUCH more expensive than U.S. cell phones. I was not at all surprised to learn that they pay the equivalent of about $800.00 U.S. for the iPhones that they were sporting.
On learning this, I felt very smug in knowing that I only spent about $200.00 for my AT&T iPhone 4s. However, as the conversation continued , my smugness quickly evaporated as we started talking about the monthly costs. It turns out that my friends are only spending about 30.00 Euros ($40.00 U.S.) on their monthly service. There is a difference in their talk minutes (I actually have less) and data plans (I technically have more, but I never use it). They can also change their service provider more easily, as their phones are not bound to one provider.
This was a bit of a surprise to me. I had assumed that prices were roughly the same if not slightly better for U.S. consumers as we have less oversight and taxes etc...
I did the math on this and found that my friends were paying the equivalent of around $850.00 less than I was for a two year period.

Total for a European phone would be something like:
Device - $800.00
24 months of service @ 40.00/month - $960.00
Total = $1760.00

For a two year contract my iPhone costs me:
Device - $200.00
24 months of service @ $100.00/month - $2400.00
Total = $2600.00